3.0 Porter’s five forces
Threat of New Entrants
The threat of new entrants, both potential and existing competitors influences average industry profitability. The threat of new entrants is usually based on the market entry barriers. Some of the barriers include cost of entry, the cost you need to bear in order to enter the particular market. Rules and regulation set by Government may also considered barriers for new entrants to enter markets. The operations of McDonald’s Malaysia are affected with the government rule and regulation of fast food operation. As a certified fast food operator, there are many regulation and procedures that McDonalds should follow. For example is the Halal certification that becomes a concern to Muslim consumers. McDonalds protect its honesty and consumer confidence by ensuring all materials and process are as claimed or must followed. The threat of new entrants is high because there are no Many people go there and the first priority for McDonald is to deliver best restaurant experience for the customers. For that, McDonald has to use the POS system “point of the scale system” to ensure fast and accurate order because this system is used to speed the business process, it can follow the very big amount of data in seconds. With this system each order is instantly transmitted to several workstations throughout the facility, the cashier instantly knows what payment is due. The kitchen knows what orders are coming up, and how long a customer has been waiting.
Bargaining power of buyers
Buyer power refers to the ability of customers of the industry to influence the price and terms of purchase. (Ryszard Barnard, 2012). The bargaining power of buyers is high when the items being purchase is standardized among sellers; the supplying industry is comprised of large numbers of relatively small sellers. While the bargaining power of buyers is low when the product is differentiated from other substitutes; customers are less price...
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